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REPORT (COM(2023)0232 – C90147/2023 – 2023/0133(COD))

On the proposal for a regulation of the European Parliament and of the Council on standard essential patents and amending Regulation (EU) 2017/1001

A-9-2024-0016

Committee on Legal Affairs · Rapporteur: Marion Walsmann Rapporteur for the opinion of the associated committee pursuant to Rule 57 of the Rules of Procedure: Danuta Maria Hübner, Committee on International Trade

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Written by a language model from the full text only; every figure comes from the text. The paragraph links open the paragraph a statement rests on — check the text itself before relying on it.

Parliament's amended version of the Commission proposal for a regulation on standard essential patents (SEPs) sets up an electronic register and database, essentiality checks, aggregate royalty determination and a FRAND determination procedure, all run by a competence centre at the European Union Intellectual Property Office (EUIPO). SEP holders must register their patents within 6 months; unregistered SEPs cannot be enforced and their holders cannot claim damages until registration is complete. A FRAND determination before litigation is mandatory, run by a panel of conciliators, and must conclude within 9 months; parties may request a provisional injunction of a financial nature. The text adds rules on patent pools, small and medium-sized enterprises (SMEs) and start-ups, including a SEP Licensing Assistance Hub, and excludes patent assertion entities from these benefits. The Commission is empowered to adopt delegated acts listing standards or implementations where SEP licensing does not give rise to significant difficulties or inefficiencies, and to evaluate the new systems after 5 years.

Committee position. The Committee on Legal Affairs supports the Commission's initiative and proposes amendments to increase legal clarity, define 'significant difficulties or inefficiencies', strengthen the competence centre, ensure transparency of patent pools, allow review of prior essentiality checks, and create a one-stop shop for SMEs and start-ups.

Key points

  1. The regulation applies to patents in force in one or more member states that a SEP holder claims to be essential to a published standard, whether or not a FRAND commitment was made.
  2. It does not apply to royalty-free SEPs, except where such SEPs are part of a portfolio licensed for royalties.
  3. A competence centre at the EUIPO must set up and maintain an electronic register and database, rosters of evaluators and conciliators, an essentiality check system and the FRAND determination process.
  4. SEP holders must register their SEPs within 6 months of the opening of registration or the grant of the patent, whichever is first, and must update registrations within 6 months of relevant changes.
  5. A SEP holder that fails to register within the time limit cannot bring a claim for infringement until registration is complete; registration may be suspended after a 1-month grace period.
  6. Essentiality checks are conducted on an annual sample of registered SEPs from different patent families; micro and small enterprises' SEPs are excluded from sampling unless they are patent assertion entities.
  7. SEP holders or implementers may designate annually up to 100 registered SEPs for essentiality checks; results are published but not legally binding.
  8. Patent pools must publish accurate and updated information on their websites, including royalties, licence agreements and lists of licensors and licensees; the competence centre verifies this at least once a year.
  9. A SEP holder or implementer may request a non-binding expert opinion on an aggregate royalty; a panel of three conciliators is appointed if SEP holders representing at least 20% of SEPs or implementers with at least 10% market share or at least 10 SMEs participate.
  10. A FRAND determination is mandatory before a SEP holder can start infringement proceedings or an implementer can ask a court to set FRAND terms, unless the Commission has identified the relevant implementations as free of significant difficulties.
  11. The FRAND determination is conducted by a panel of conciliators, must not exceed 9 months, and either party may request a provisional injunction of a financial nature pending the procedure.
  12. The competence centre must set up a SEP Licensing Assistance Hub for SMEs and start-ups, offering free help to identify relevant SEPs, licensors, licensees and training; patent assertion entities are excluded from these benefits.

Who is affected

  • SEP holders: must register patents, update information, and cannot enforce unregistered SEPs or claim damages until registration is complete.
  • SEP implementers: can request aggregate royalty opinions and FRAND determinations, and may seek provisional financial injunctions.
  • SMEs and start-ups: benefit from reduced fees, free support and a SEP Licensing Assistance Hub, but not if they are patent assertion entities.
  • Patent pools: must publish detailed licensing information and are subject to annual verification by the competence centre.
  • National courts: must notify the competence centre of final decisions on SEPs within 2 months and suspend proceedings during FRAND determination.

Figures and deadlines

  • 6 months: deadline for SEP holders to register their SEPs after registration opens or the patent is granted.
  • 1 month: grace period before registration is suspended for failure to register or update.
  • 100: maximum number of registered SEPs that SEP holders or implementers may designate annually for essentiality checks.
  • 9 months: maximum duration of the FRAND determination.
  • 20%: minimum share of SEPs that SEP holders must represent collectively for a panel of conciliators to be appointed for an aggregate royalty opinion.
  • 10%: minimum relevant market share in the Union that implementers must hold collectively for a panel of conciliators to be appointed.
  • 90 days: period for SEP holders to notify individually if no joint notification is made, and for stakeholders to submit observations on sampled SEPs.
  • 5 years: period after entry into force for the Commission's first evaluation of the regulation.

Legal basis: Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union.